Your favourite SUV may cost more now; find out by how much

Planning to buy yourself an SUV for your birthday next year? The Finance Minister may have spoilt your party.

A hike in tax on sport utility vehicles (SUVs) in India has taken automobile companies by surprise. Given that the segment is one of the bright spots in the country's automotive market, which is heading into decade-low sales, automakers may have no choice but to pass on the costs to consumers.

"TKM (Toyota Kirloskar Motors) will pass on the entire burden to consumers. The excise hike will affect our multi-utility vehicle Innova and SUV Fortuner, while the hike in customs duty will make our Land Cruiser and Prado costlier," Sandeep Singh, TKM deputy managing director and COO (marketing and commercial), said.

"This is not a good Budget for the automobile industry. With duty hikes, all manufacturers will pass on the burden to consumers and this will further dampen the ongoing sluggish sales," he added.

Sales of utility vehicles in India rose 57 per cent in the nine months to December, against a 2 per cent fall in car sales.

Mr Chidambaram's Budget for fiscal 2013-14 has proposed a hike in the duty paid by the manufacturers of the vehicles to 30 per cent from 27 per cent, but does not include a reduction in excise on small cars.

"SUVs occupy greater road and parking space and ought to bear a higher tax," the Finance Minister said in Parliament in his Budget speech.

High interest rates and rising fuel costs combined with sluggish economic growth in Asia's third-largest economy have slammed the brakes on India's car industry, once one of the world's most promising growth markets.

"Given the growth in that sector, that's going to hit very hard," Lowell Paddock, managing director of General Motors' Indian operations, adding, "It's going to affect a lot of different manufacturers here ... I was surprised by that."

What I guess I find frustrating is that there was not a recognition that the industry is currently in the doldrums," Mr Paddock said, adding that the specific details of the SUV duty hike would be important in determining its impact.

"No quarrel if all large cars are taxed... singling out SUVs destroys a level field. Sad that one has to fight harder to succeed in one's own country," tweeted a dismayed Anand Mahindra, chairman and managing director of Mahindra & Mahindra, the manufacturer of popular SUVs such as Scorpio and XUV 500.

Here's a look at how prices of SUVs and super cars will be affected should the companies decide to pass on the entire burden of the tax hike to consumers:

• Toyota Innova -dearer by Rs 30,000-50,000
• Toyota Fortuner - dearer by Rs 60,000-70,000
• Toyota Prado - dearer by Rs 10-12 lakh
• Land Cruiser - dearer by around Rs 15 lakh
• Renault Duster - dearer by around Rs 24,000
• Mahindra XUV 500 - dearer by around Rs 1 lakh
• Mahindra Scorpio - dearer by around Rs 22,000
• Tata Safari Storme - dearer by around Rs 35,000
• Porsche 911 - dearer by Rs 29-72 lakh
• Aston Martin - dearer by Rs 45 lakh - Rs 1 crore

The basic customs duty on motorcycles with engine capacity of 800cc or more has also been increased from 60 per cent to 75 per cent. Here's how the price of superbikes will be affected:

• Suzuki Hayabusa - Company says no price hike
• Harley Davisdon - dearer by Rs 1.5-1.75 lakh

With inputs from Reuters and PTI